New Year, New Leaf?The big question, folks, is what does 2012 have in store for us? What will in bring for us personally, for us as Hiltonians, for us as a country and for us a global community?
I want to stick my neck out and predict that 2012 will be a great year, a year where we indeed see green shoots and begin to see a bit of confidence creep back into the financial markets and the local property market. It's no secret that the local property market has been sluggish, properties aren't selling at the lofty heights they once were, people aren't seeing the returns and worst of all it's only the realistic sellers that have been moving property!
Don't get me wrong, I don't think 2012 is going to boom but I do think we are going to see an attitude shift. I mean, it's already evident. The Dow Jones industrial average rose 179 points on the first trading day of 2012. That's great news as there is something which analysts refer to as the January Effect which promises that if trading in the first week of the year is positive it will continue to be positive for the rest of the year. This has proved true 85% of the time since the end of World War II. Let's keep the ball rolling!
But before we look too far into the future let's have a little look at what property was doing over the last little portion in 2011. Let's have a look at some interesting numbers for central Hilton, what some people call 'Olde Hilton', to get an indication as to what the market has been doing...
Unsurprisingly, as illustrated below, the largest group of sellers is those who have owned for 11 years or more, followed by those in the 8 to 10 years bracket. What stands out, however, is that there are a disproportionate number of people in the 8 to 10 year category who are selling, when compared to the number of who have owned for 8-10 years. Apparently that's an appropriate amount of time to have had a house!
When we look at the age demographic of Hilton we can see that currently the largest portion of our population is made up of those in the 50 to 64 year old category closely followed by the 35 to 49 year olds. The 18 to 35 year olds barely have a foothold in the Hilton market at present.
Now, when we compare that to the recent buyers and recent sellers you can see that the 36 to 49 year old category roughly holds its own all the way along with a lean towards more buying than selling. In reality there is probably a lot of churn in this category with people selling one house in Hilton and trading it for another, usually trading up.
The 50 to 65 year olds make up a large portion of our society but generally don't seem to be pulling their weight in the market. They are buying and selling roughly the same number of properties but generally seem to be hanging onto them for longer.
The trade off seems to come in at the top and bottom levels. People who are 65 plus making up a large portion of the sellers and 18 to 36 year olds seem to be taking up the slack on the buying end. As we have to assume that a large portion of those 18 to 35 year olds buying are first time buyers it looks as though our Hilton may be attracting a younger buyer than it has been in the past.
Then looking at sales volumes, in the last three months 18 transfers have gone through with a total value of just under twenty three million rand. As you'd expect no properties sold for over R3m, with 61% of the transfers occurring in the R 800,000 to R1,5m price band. The average price of a property sold in Hilton over the last three months is R 1,276m.
The average sale price for 2011 was R 1,127m which is still down from the high in 2007 of R 1,225m but up for 2010 when the average price was R 1,098m.
So, things are actually looking up. Average sales prices are rising, even though they haven't yet reached their once before seen highs. Sales volumes have grown from a low in 2009 of 74 to a healthy 105 in 2011 but we are a long way off 2004 when we saw 168 central Hilton properties changing hands.
Statistically the beginning of the year is a good time for property searches; let's hope we have our January Effect! At Avidity we realise the numbers matter. You need to understand where you stand in the market before you make an educated decision. Come and see us before you decide to buy or sell, there is a lot more information at our disposal that can help you!
Thank you Andrew Morphew for sharing your views with HiltonVillage.co.za.